Published on Dani Rodrik’s weblog, unconventional thoughts on economic development and globalization, by Dani Rodrik, April 25, 2008.
… Trade works by relieving the relative scarcity of goods. The key here is the term “relative.” Food importing countries are food scarce countries, and as they open up to trade, the relative price of food falls. But if you are Thailand or Argentina, where other goods are scarce relative to food, freer trade means higher relative prices of food, not lower. And all the induced efficiency benefits and short- vs. long-run effects that Cowen talks about have no bearing on this conclusion: in the end some countries have to be net importers, and others net exporters. (full text).
More links about economy and food:
HIGH FOOD PRICES LEAVE DEVELOPING COUNTRIES STRUGGLING TO COPE, on ICTSD, April 28, 2008;
FAO’s Initiative on Soaring Food Prices, Information Note;
World Food Situation, by FAO.org:
- food emergencies;
- list of countries in crises;
- global cereal supply and demand;
- FAO indicators for global cereal supply and demand;
- HIGH PRICES AND VOLATILITY IN AGRICULTURAL COMMODITIES.
a world bank’s press release, April 13, 2008.